Fast Short Term Finance
This high speed short term finance maybe used for the purpose of an auction purchase for a home or investment property. For potentially down sizing to a smaller house or if there is a need to break out of a chain of buyers and sellers.
Prime bridging maybe used for a property portfolio purchase. The fast time it takes to source the finance can be the difference between achieving a good deal or losing an opportunity. There are no exit fees which in some cases can be quite considerable so this keeps costs down. There are no margin costs either so for example some bridging lending will load the valuation and solicitor costs in order to make extra profit. And there are competitive low rates o the monthly payments. This combination makes the deal as a whole a quality financial product.
There is normally an entrance fee along with the basic valuation and legals costs. An exit strategy would normally be the sale of a property or monies to be received soon after the short term lending is obtained. This product can be FSA or non-FSA regulated, so for an example a purchase of buy to let at auction would be non-FSA. However if someone was in a long chain to sell their home and move into a new home and this was effecting the time it took to purchase then a short cut would be via a bridge this then would be FSA regulated. Regarding being regulated or not is similar to a secured loan but that would be generally for a longer time period.
Bridging may also be used for payment of bills, this could be as large tax or VAT bill. It might also be used in order to free up cash flow. Sums of borrowing can be for several million if the underwriters are content that the loan can be serviced and their risk is low by having good security.
French lenders for example may will look for high net worth clients so reducing their risk. If a client has a good credit rating and is wealthy, in the form of tangible assets, high income or a valuable property owner then they will be able to obtain a big bridging loan which has a very fast completion time.